In re PJT Partners LP

 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 102167 / January 13, 2025 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22404 
 
 
In the Matter of 
 
PJT Partners LP, 
 
Respondent. 
 
 
 
 
ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 15(b) AND 21C 
OF THE SECURITIES EXCHANGE ACT OF 
1934, MAKING FINDINGS, AND IMPOSING 
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER  
   
 
I. 
 
The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange 
Act”) against PJT Partners LP (“PJT Partners”).  
 
II. 
 
In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept. Respondent admits 
the facts set forth in Section III below, acknowledges that its conduct violated the federal securities 
laws, admits the Commission’s jurisdiction over it and the subject matter of these proceedings, and 
consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings, 
Pursuant to Sections 15(b) and 21C of the Exchange Act, Making Findings, and Imposing 
Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.  
 
 

 2 
III. 
 
On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that:  
 
Summary 
 
1. The federal securities laws impose recordkeeping requirements on broker-dealers to 
ensure that they responsibly discharge their crucial role in our markets. The Commission has long 
said that compliance with these requirements is essential to investor protection and the 
Commission’s efforts to further its mandate of protecting investors, maintaining fair, orderly, and 
efficient markets, and facilitating capital formation. These proceedings arise out of PJT Partners’ 
self-report of failures of employees across the firm, including at senior levels, to adhere to certain of 
these essential requirements and the firm’s own policies and procedures. Using their personal 
devices, these employees communicated both internally and externally by personal text messages or 
other text messaging platforms such as WhatsApp (“off-channel communications”). 
 
2. PJT Partners contacted and consulted Commission staff prior to conducting its 
voluntary internal investigation. Following the internal investigation, PJT Partners self-reported the 
findings to the Commission staff. PJT Partners’ internal investigation, along with proactive 
identification of key facts and supporting documents, assisted the Commission staff in efficiently 
investigating the conduct. Prior to and since contacting the Division of Enforcement, PJT Partners 
also undertook significant measures with respect to its recordkeeping practices, policies and 
procedures, and related monitoring and training.  
 
3. From at least March 2021 through March 2023, PJT Partners’ employees sent and 
received off-channel communications that related to its broker-dealer business. Respondent did not 
maintain or preserve the majority of these written communications. Respondent’s failures occurred 
across the firm and involved employees at various levels of authority. As a result, PJT Partners 
violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder.  
 
4. Respondent’s failure to implement a system reasonably expected to determine 
whether all employees were following its policies and procedures that prohibit such 
communications led to its failure to reasonably supervise its employees within the meaning of 
Section 15(b)(4)(E) of the Exchange Act.  
 
5. Following news that the Commission would commence a risk-based initiative to 
investigate the use of off-channel and unpreserved communications at broker-dealers, PJT Partners 
initiated a review of its recordkeeping policies and attempted to further enhance its training, 
compliance, and monitoring programs. As discussed below, violations of recordkeeping 
requirements continued.  
 
                                                 
1
  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 
binding on any other person or entity in this or any other proceeding. 

 3 
Respondent 
 
6. PJT Partners LP (“PJT Partners”) is a Delaware corporation with its principal 
office in New York City, New York, and has been registered with the Commission as a broker-
dealer since 2014. It is a subsidiary entity ultimately operated and controlled by PJT Partners Inc., a 
global investment bank incorporated in Delaware and headquartered in New York, New York. 
Shares of PJT Partners Inc. trade on the New York Stock Exchange.   
 
Recordkeeping Requirements Under the Exchange Act 
 
7. Section 17(a)(1) of the Exchange Act authorizes the Commission to issue rules 
requiring broker-dealers to make and keep for prescribed periods, and furnish copies of, such 
records as necessary or appropriate in the public interest, for the protection of investors or otherwise 
in furtherance of the purposes of the Exchange Act. 
 
8. The Commission adopted Rule 17a-4 pursuant to this authority. Rule 17a-4 specifies 
the manner and length of time that the records made in accordance with other Commission rules, 
and certain other records made by broker-dealers, must be maintained and produced promptly to 
Commission representatives.  
 
9. The rules adopted under Section 17(a)(1) of the Exchange Act, including Rule 17a-
4(b)(4), require that broker-dealers preserve for at least three years, the first two years in an easily 
accessible place, originals of all communications received and copies of all communications sent 
relating to the firm’s business as such. These rules impose minimum recordkeeping requirements 
that are based on standards a prudent broker-dealer should follow in the normal course of business. 
 
10. The Commission previously has stated that these and other recordkeeping 
requirements “are an integral part of the investor protection function of the Commission, and other 
securities regulators, in that the preserved records are the primary means of monitoring compliance 
with applicable securities laws, including antifraud provisions and financial responsibility 
standards.” Commission Guidance to Broker-Dealers on the Use of Electronic Storage Media under 
the Electronic Signatures in Global and National Commerce Act of 2000 with Respect to Rule 17a-
4(f), 17 C.F.R. Part 241, Exchange Act Rel. No. 44238 (May 1, 2001). 
 
PJT Partners’ Policies and Procedures 
 
11. PJT Partners maintained certain policies and procedures designed to ensure the 
retention of business-related records, including electronic communications, in compliance with the 
relevant recordkeeping provisions. 
 
12. As early as 2016, PJT Partners’ employees were advised that the use of unapproved 
electronic communications methods, including on their personal devices, was not permitted, and 
they should not use personal email, chats or text messaging applications for business purposes, or 
forward work-related communications to unapproved software applications on their personal 
devices. 

 4 
 
13. Messages sent through PJT Partners-approved communications methods, which 
have included Bloomberg Messaging and Slack since 2016 and Microsoft Lync since 2015, were 
monitored, subject to review, and when appropriate, archived. Messages sent through unapproved 
communication methods, such as personal text messaging and unapproved applications on mobile 
devices, were not monitored, subject to review, or archived, unless employees brought such 
messages to a firm-approved channel. Since 2017, PJT Partners has had in place a lexicon-based 
surveillance system to monitor employee communications and flag for further review potential 
indications of off-channel use.  
 
14. PJT Partners’ policies were designed to address the firm’s supervision of employees’ 
training in and adherence to PJT Partners’ communications policies and books and recordkeeping 
requirements. Supervisory policies notified employees that electronic communications were subject 
to surveillance by PJT Partners. PJT Partners had procedures for all employees, including 
supervisors, requiring semi-annual and, more recently, quarterly self-attestations of compliance. 
 
15. PJT Partners, however, failed adequately to implement a system reasonably 
expected to determine whether employees, including supervisors, were reasonably following PJT 
Partners’ policies. While permitting employees to use approved communications methods, 
including on personal phones, for business communications, PJT Partners failed to implement 
sufficient monitoring to ensure that its recordkeeping and communications policies were being 
followed. 
 
PJT Partners’ Recordkeeping Failures 
 
16. In September 2021, the Commission staff commenced a risk-based initiative to 
investigate whether broker-dealers were properly retaining business-related messages sent and 
received on personal devices. In February 2024, PJT Partners voluntarily contacted the staff 
regarding off-channel communications related to its broker-dealer business. PJT Partners cooperated 
with the staff’s investigation by proactively gathering information and documents concerning the 
underlying conduct and responding to the staff’s requests for additional information. As reported to 
the Commission staff, PJT Partners’ employees had engaged in the use of off-channel 
communications.  
 
17. PJT Partners collected information from a sampling of its employees at varying 
degrees of seniority, including vice presidents, managing directors, and partners, and found that all 
of the sampled employees had engaged in some level of off-channel communications. Overall, these 
employees sent and received numerous off-channel communications involving other PJT Partners 
employees, PJT Partners’ broker-dealer clients, and other market participants in the securities 
industry. PJT Partners’ employees responsible for supervising junior employees and their 
compliance with policies and procedures pertaining to off-channel communications themselves 
communicated off-channel using their personal devices. Many, but not all, of the sampled 
employees had begun a regular practice of forwarding off-channel communications to the firm’s 
systems by early 2022.  
 

 5 
18. From at least March 2021 through March 2023, PJT Partners employees sent and 
received off-channel messages that concerned its broker-dealer business. 
 
19. For example, one partner had off-channel communications with over a dozen PJT 
Partners employees, including employees he directly supervised, as well as off-channel 
communications with approximately 30 investment banking clients and/or other market participants.  
 
20. Similarly, another partner had off-channel communications with several PJT 
Partners employees, including employees he directly supervised, and approximately 29 investment 
banking clients and/or other market participants.  
 
21. In addition, a managing director had off-channel communications with numerous 
PJT Partners employees, more junior employees and approximately seven investment banking 
clients and/or other market participants.  
 
Respondent’s Violations and Failure to Supervise 
 
22. As a result of the conduct described above, from at least March 2021 through March 
2023, PJT Partners willfully
2
 violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) 
thereunder, which require broker-dealers to preserve for at least three years, the first two years in an 
easily accessible place, originals of all communications received and copies of all communications 
sent relating to its business as such.  
 
23. As a result of the conduct described above, PJT Partners failed reasonably to 
supervise its employees with a view to preventing or detecting certain of its employees’ aiding and 
abetting violations of Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder, within 
the meaning of Section 15(b)(4)(E) of the Exchange Act.  
 
PJT Partners’ Self-Reporting, Cooperation, and Remedial Efforts 
 
24. In determining to accept the Offer, the Commission considered PJT Partners’ self-
report, cooperation afforded to the Commission staff, and remediation. Respondent conducted an 
internal investigation and self-reported the facts to the Commission staff. Prior to approaching 
Commission staff, PJT Partners had already increased compliance efforts, which included testing 
and implementing an application on employee devices to help keep messaging on-channel and 
increasing the frequency of electronic communications training for employees. PJT Partners also 
implemented a process for employees to easily onboard and preserve any off-channel 
communications that had already taken place.  
 
                                                 
2
 “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act 
“‘means no more than that the person charged with the duty knows what he is doing.’” Wonsover 
v. SEC, 205 F.3d 408, 414 (D.C. Cir 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. 
Cir. 1949)). 

 6 
Undertakings 
 
25. Prior to this action, PJT Partners enhanced its policies and procedures, and increased 
training concerning the use of approved communications methods, including on personal devices.  
 
26. In addition, Respondent has undertaken to:  
 
27. Internal Audit. Within one hundred eighty (180) days of the entry of this Order, PJT 
Partners will have its Internal Audit function initiate a separate audit(s), to be completed within 
three hundred and sixty-five (365) days of the entry of this Order, consisting of the following: 
 
a.  A comprehensive review of PJT Partners’ supervisory, compliance, and 
other policies and procedures designed to ensure that PJT Partners’ electronic 
communications, including those found on personal electronic devices, including 
without limitation, cellular phones (“Personal Devices”), are preserved in accordance 
with the requirements of the federal securities laws.  
 
b.  A comprehensive review of training conducted by PJT Partners designed to 
ensure employees are complying with the requirements regarding the preservation of 
electronic communications, including those found on Personal Devices, in accordance 
with the requirements of the federal securities laws, as well as a review of PJT Partners’ 
requirement that their employees certify in writing on a periodic basis that they are 
complying with preservation requirements. 
 
c.  An assessment of the surveillance program measures implemented by PJT 
Partners designed to ensure compliance, on an ongoing basis, with the requirements 
found in the federal securities laws to preserve electronic communications, including 
those found on Personal Devices. 
 
d.  An assessment of the technological solutions that PJT Partners has begun 
implementing to meet the record retention requirements of the federal securities laws, 
including an assessment of the likelihood that PJT Partners’ employees will use the 
technological solutions going forward and a review of the measures employed by PJT 
Partners to track employee usage of new technological solutions. 
 
e.  An assessment of the measures used by PJT Partners to prevent the use of 
unauthorized communications methods for business communications by employees. 
This assessment should include, but not be limited to, a review of PJT Partners’ policies 
and procedures to ascertain if they provide for any significant technology and/or 
behavioral restrictions that help prevent the risk of the use of unapproved 
communications methods on Personal Devices. 
 
f.  A review of PJT Partners’ electronic communications surveillance routines 
to ensure that electronic communications through approved communications methods 

 7 
found on Personal Devices are incorporated into PJT Partners’ overall communications 
surveillance program. 
 
g.  A comprehensive review of the framework adopted by PJT Partners to 
address instances of non-compliance by PJT Partners’ employees with PJT Partners’ 
policies and procedures concerning the use of Personal Devices to communicate about 
PJT Partners business in the past. This review shall include a survey of how PJT 
Partners determined which employees failed to comply with PJT Partners’ policies and 
procedures, the corrective action carried out, an evaluation of who violated the policies 
and procedures and why, what penalties were imposed, and whether penalties were 
handed out consistently across business lines and seniority levels. 
 
28. Recordkeeping. PJT Partners shall preserve, for a period of not less than six (6) 
years from the end of the fiscal year last used, the first two (2) years in an easily accessible place, 
any record of compliance with these undertakings.  
 
29. Deadlines. For good cause shown, the Commission staff may extend any of the 
procedural dates relating to the undertakings. Deadlines for procedural dates shall be counted in 
calendar days, except that if the last day falls on a weekend or federal holiday, the next business day 
shall be considered to be the last day. 
 
30. Certification. PJT Partners shall certify, in writing, compliance with the 
undertakings set forth above. The certification shall identify the undertakings and provide written 
evidence of compliance in the form of a narrative. The Commission staff may make reasonable 
requests for further evidence of compliance, and Respondent agrees to provide such evidence. The 
certification shall be submitted to Thomas P. Smith, Jr., Associate Regional Director, New York 
Regional Office, Securities and Exchange Commission, 100 Pearl Street, Suite 20-100, New York, 
NY 10004, or such other person as the Commission staff may request, with a copy to the Office of 
Chief Counsel of the Enforcement Division, no later than sixty (60) days from the date of the 
completion of the undertakings. 
 
31. In determining whether to accept the Offer, the Commission has considered these 
undertakings. 
  
IV. 
 In view of the foregoing, the Commission deems it appropriate and in the public 
interest to impose the sanctions agreed to in Respondent PJT Partners’ Offer. 
 
 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act, it is hereby 
ORDERED that: 
 
 A. Respondent PJT Partners cease and desist from committing or causing any 
violations and any future violations of Section 17(a) of the Exchange Act, and Rule 17a-4 
thereunder.  

 8 
 
B. Respondent PJT Partners is censured.   
 
C. Respondent PJT Partners shall, within 14 days of the entry of this Order, 
pay a civil money penalty in the amount of $600,000 to the Securities and Exchange Commission 
for transfer to the general fund of the United States Treasury, subject to Exchange Act Section 
21F(g)(3). If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 
§3717.   
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying PJT 
Partners as a Respondent in these proceedings, and the file number of these proceedings; a copy of 
the cover letter and check or money order must be sent to Thomas P. Smith, Jr., Associate 
Regional Director, New York Regional Office, Securities and Exchange Commission, 100 Pearl 
Street, Suite 20-100, New York, NY 10004.   
 
 D. Amounts ordered to be paid as civil money penalties pursuant to this Order 
shall be treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 
the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 
Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding.   

 9 
For purposes of this paragraph, a “Related Investor Action” means a private damages action 
brought against Respondent by or on behalf of one or more investors based on substantially the 
same facts as alleged in the Order instituted by the Commission in this proceeding. 
 
By the Commission. 
 
 
 
Vanessa A. Countryman 
        Secretary 
 
 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 102167 / January 13, 2025 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22404 

 

 

In the Matter of 

 

PJT Partners LP, 

 

Respondent. 

 

 

 

 

ORDER INSTITUTING ADMINISTRATIVE 

AND CEASE-AND-DESIST PROCEEDINGS, 

PURSUANT TO SECTIONS 15(b) AND 21C 

OF THE SECURITIES EXCHANGE ACT OF 

1934, MAKING FINDINGS, AND IMPOSING 

REMEDIAL SANCTIONS AND A CEASE-

AND-DESIST ORDER  

   

 

I. 

 

The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative and cease-and-desist proceedings be, and hereby are, 

instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange 

Act”) against PJT Partners LP (“PJT Partners”).  

 

II. 

 

In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept. Respondent admits 

the facts set forth in Section III below, acknowledges that its conduct violated the federal securities 

laws, admits the Commission’s jurisdiction over it and the subject matter of these proceedings, and 

consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings, 

Pursuant to Sections 15(b) and 21C of the Exchange Act, Making Findings, and Imposing 

Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.  

 

 



 2 

III. 

 

On the basis of this Order and Respondent’s Offer, the Commission finds1 that:  

 

Summary 

 

1. The federal securities laws impose recordkeeping requirements on broker-dealers to 

ensure that they responsibly discharge their crucial role in our markets. The Commission has long 

said that compliance with these requirements is essential to investor protection and the 

Commission’s efforts to further its mandate of protecting investors, maintaining fair, orderly, and 

efficient markets, and facilitating capital formation. These proceedings arise out of PJT Partners’ 

self-report of failures of employees across the firm, including at senior levels, to adhere to certain of 

these essential requirements and the firm’s own policies and procedures. Using their personal 

devices, these employees communicated both internally and externally by personal text messages or 

other text messaging platforms such as WhatsApp (“off-channel communications”). 

 

2. PJT Partners contacted and consulted Commission staff prior to conducting its 

voluntary internal investigation. Following the internal investigation, PJT Partners self-reported the 

findings to the Commission staff. PJT Partners’ internal investigation, along with proactive 

identification of key facts and supporting documents, assisted the Commission staff in efficiently 

investigating the conduct. Prior to and since contacting the Division of Enforcement, PJT Partners 

also undertook significant measures with respect to its recordkeeping practices, policies and 

procedures, and related monitoring and training.  

 

3. From at least March 2021 through March 2023, PJT Partners’ employees sent and 

received off-channel communications that related to its broker-dealer business. Respondent did not 

maintain or preserve the majority of these written communications. Respondent’s failures occurred 

across the firm and involved employees at various levels of authority. As a result, PJT Partners 

violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder.  

 

4. Respondent’s failure to implement a system reasonably expected to determine 

whether all employees were following its policies and procedures that prohibit such 

communications led to its failure to reasonably supervise its employees within the meaning of 

Section 15(b)(4)(E) of the Exchange Act.  

 

5. Following news that the Commission would commence a risk-based initiative to 

investigate the use of off-channel and unpreserved communications at broker-dealers, PJT Partners 

initiated a review of its recordkeeping policies and attempted to further enhance its training, 

compliance, and monitoring programs. As discussed below, violations of recordkeeping 

requirements continued.  

 

                                                 
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 

binding on any other person or entity in this or any other proceeding. 



 3 

Respondent 

 

6. PJT Partners LP (“PJT Partners”) is a Delaware corporation with its principal 

office in New York City, New York, and has been registered with the Commission as a broker-

dealer since 2014. It is a subsidiary entity ultimately operated and controlled by PJT Partners Inc., a 

global investment bank incorporated in Delaware and headquartered in New York, New York. 

Shares of PJT Partners Inc. trade on the New York Stock Exchange.   

 

Recordkeeping Requirements Under the Exchange Act 

 

7. Section 17(a)(1) of the Exchange Act authorizes the Commission to issue rules 

requiring broker-dealers to make and keep for prescribed periods, and furnish copies of, such 

records as necessary or appropriate in the public interest, for the protection of investors or otherwise 

in furtherance of the purposes of the Exchange Act. 

 

8. The Commission adopted Rule 17a-4 pursuant to this authority. Rule 17a-4 specifies 

the manner and length of time that the records made in accordance with other Commission rules, 

and certain other records made by broker-dealers, must be maintained and produced promptly to 

Commission representatives.  

 

9. The rules adopted under Section 17(a)(1) of the Exchange Act, including Rule 17a-

4(b)(4), require that broker-dealers preserve for at least three years, the first two years in an easily 

accessible place, originals of all communications received and copies of all communications sent 

relating to the firm’s business as such. These rules impose minimum recordkeeping requirements 

that are based on standards a prudent broker-dealer should follow in the normal course of business. 

 

10. The Commission previously has stated that these and other recordkeeping 

requirements “are an integral part of the investor protection function of the Commission, and other 

securities regulators, in that the preserved records are the primary means of monitoring compliance 

with applicable securities laws, including antifraud provisions and financial responsibility 

standards.” Commission Guidance to Broker-Dealers on the Use of Electronic Storage Media under 

the Electronic Signatures in Global and National Commerce Act of 2000 with Respect to Rule 17a-

4(f), 17 C.F.R. Part 241, Exchange Act Rel. No. 44238 (May 1, 2001). 

 

PJT Partners’ Policies and Procedures 

 

11. PJT Partners maintained certain policies and procedures designed to ensure the 

retention of business-related records, including electronic communications, in compliance with the 

relevant recordkeeping provisions. 

 

12. As early as 2016, PJT Partners’ employees were advised that the use of unapproved 

electronic communications methods, including on their personal devices, was not permitted, and 

they should not use personal email, chats or text messaging applications for business purposes, or 

forward work-related communications to unapproved software applications on their personal 

devices. 



 4 

 

13. Messages sent through PJT Partners-approved communications methods, which 

have included Bloomberg Messaging and Slack since 2016 and Microsoft Lync since 2015, were 

monitored, subject to review, and when appropriate, archived. Messages sent through unapproved 

communication methods, such as personal text messaging and unapproved applications on mobile 

devices, were not monitored, subject to review, or archived, unless employees brought such 

messages to a firm-approved channel. Since 2017, PJT Partners has had in place a lexicon-based 

surveillance system to monitor employee communications and flag for further review potential 

indications of off-channel use.  

 

14. PJT Partners’ policies were designed to address the firm’s supervision of employees’ 

training in and adherence to PJT Partners’ communications policies and books and recordkeeping 

requirements. Supervisory policies notified employees that electronic communications were subject 

to surveillance by PJT Partners. PJT Partners had procedures for all employees, including 

supervisors, requiring semi-annual and, more recently, quarterly self-attestations of compliance. 

 

15. PJT Partners, however, failed adequately to implement a system reasonably 

expected to determine whether employees, including supervisors, were reasonably following PJT 

Partners’ policies. While permitting employees to use approved communications methods, 

including on personal phones, for business communications, PJT Partners failed to implement 

sufficient monitoring to ensure that its recordkeeping and communications policies were being 

followed. 

 

PJT Partners’ Recordkeeping Failures 

 

16. In September 2021, the Commission staff commenced a risk-based initiative to 

investigate whether broker-dealers were properly retaining business-related messages sent and 

received on personal devices. In February 2024, PJT Partners voluntarily contacted the staff 

regarding off-channel communications related to its broker-dealer business. PJT Partners cooperated 

with the staff’s investigation by proactively gathering information and documents concerning the 

underlying conduct and responding to the staff’s requests for additional information. As reported to 

the Commission staff, PJT Partners’ employees had engaged in the use of off-channel 

communications.  

 

17. PJT Partners collected information from a sampling of its employees at varying 

degrees of seniority, including vice presidents, managing directors, and partners, and found that all 

of the sampled employees had engaged in some level of off-channel communications. Overall, these 

employees sent and received numerous off-channel communications involving other PJT Partners 

employees, PJT Partners’ broker-dealer clients, and other market participants in the securities 

industry. PJT Partners’ employees responsible for supervising junior employees and their 

compliance with policies and procedures pertaining to off-channel communications themselves 

communicated off-channel using their personal devices. Many, but not all, of the sampled 

employees had begun a regular practice of forwarding off-channel communications to the firm’s 

systems by early 2022.  

 



 5 

18. From at least March 2021 through March 2023, PJT Partners employees sent and 

received off-channel messages that concerned its broker-dealer business. 

 

19. For example, one partner had off-channel communications with over a dozen PJT 

Partners employees, including employees he directly supervised, as well as off-channel 

communications with approximately 30 investment banking clients and/or other market participants.  

 

20. Similarly, another partner had off-channel communications with several PJT 

Partners employees, including employees he directly supervised, and approximately 29 investment 

banking clients and/or other market participants.  

 

21. In addition, a managing director had off-channel communications with numerous 

PJT Partners employees, more junior employees and approximately seven investment banking 

clients and/or other market participants.  

 

Respondent’s Violations and Failure to Supervise 

 

22. As a result of the conduct described above, from at least March 2021 through March 

2023, PJT Partners willfully2 violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) 

thereunder, which require broker-dealers to preserve for at least three years, the first two years in an 

easily accessible place, originals of all communications received and copies of all communications 

sent relating to its business as such.  

 

23. As a result of the conduct described above, PJT Partners failed reasonably to 

supervise its employees with a view to preventing or detecting certain of its employees’ aiding and 

abetting violations of Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder, within 

the meaning of Section 15(b)(4)(E) of the Exchange Act.  

 

PJT Partners’ Self-Reporting, Cooperation, and Remedial Efforts 

 

24. In determining to accept the Offer, the Commission considered PJT Partners’ self-

report, cooperation afforded to the Commission staff, and remediation. Respondent conducted an 

internal investigation and self-reported the facts to the Commission staff. Prior to approaching 

Commission staff, PJT Partners had already increased compliance efforts, which included testing 

and implementing an application on employee devices to help keep messaging on-channel and 

increasing the frequency of electronic communications training for employees. PJT Partners also 

implemented a process for employees to easily onboard and preserve any off-channel 

communications that had already taken place.  

 

                                                 
2 “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act 

“‘means no more than that the person charged with the duty knows what he is doing.’” Wonsover 

v. SEC, 205 F.3d 408, 414 (D.C. Cir 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. 

Cir. 1949)). 



 6 

Undertakings 

 

25. Prior to this action, PJT Partners enhanced its policies and procedures, and increased 

training concerning the use of approved communications methods, including on personal devices.  

 

26. In addition, Respondent has undertaken to:  

 

27. Internal Audit. Within one hundred eighty (180) days of the entry of this Order, PJT 

Partners will have its Internal Audit function initiate a separate audit(s), to be completed within 

three hundred and sixty-five (365) days of the entry of this Order, consisting of the following: 

 

a.  A comprehensive review of PJT Partners’ supervisory, compliance, and 

other policies and procedures designed to ensure that PJT Partners’ electronic 

communications, including those found on personal electronic devices, including 

without limitation, cellular phones (“Personal Devices”), are preserved in accordance 

with the requirements of the federal securities laws.  

 

b.  A comprehensive review of training conducted by PJT Partners designed to 

ensure employees are complying with the requirements regarding the preservation of 

electronic communications, including those found on Personal Devices, in accordance 

with the requirements of the federal securities laws, as well as a review of PJT Partners’ 

requirement that their employees certify in writing on a periodic basis that they are 

complying with preservation requirements. 

 

c.  An assessment of the surveillance program measures implemented by PJT 

Partners designed to ensure compliance, on an ongoing basis, with the requirements 

found in the federal securities laws to preserve electronic communications, including 

those found on Personal Devices. 

 

d.  An assessment of the technological solutions that PJT Partners has begun 

implementing to meet the record retention requirements of the federal securities laws, 

including an assessment of the likelihood that PJT Partners’ employees will use the 

technological solutions going forward and a review of the measures employed by PJT 

Partners to track employee usage of new technological solutions. 

 

e.  An assessment of the measures used by PJT Partners to prevent the use of 

unauthorized communications methods for business communications by employees. 

This assessment should include, but not be limited to, a review of PJT Partners’ policies 

and procedures to ascertain if they provide for any significant technology and/or 

behavioral restrictions that help prevent the risk of the use of unapproved 

communications methods on Personal Devices. 

 

f.  A review of PJT Partners’ electronic communications surveillance routines 

to ensure that electronic communications through approved communications methods 



 7 

found on Personal Devices are incorporated into PJT Partners’ overall communications 

surveillance program. 

 

g.  A comprehensive review of the framework adopted by PJT Partners to 

address instances of non-compliance by PJT Partners’ employees with PJT Partners’ 

policies and procedures concerning the use of Personal Devices to communicate about 

PJT Partners business in the past. This review shall include a survey of how PJT 

Partners determined which employees failed to comply with PJT Partners’ policies and 

procedures, the corrective action carried out, an evaluation of who violated the policies 

and procedures and why, what penalties were imposed, and whether penalties were 

handed out consistently across business lines and seniority levels. 

 

28. Recordkeeping. PJT Partners shall preserve, for a period of not less than six (6) 

years from the end of the fiscal year last used, the first two (2) years in an easily accessible place, 

any record of compliance with these undertakings.  

 

29. Deadlines. For good cause shown, the Commission staff may extend any of the 

procedural dates relating to the undertakings. Deadlines for procedural dates shall be counted in 

calendar days, except that if the last day falls on a weekend or federal holiday, the next business day 

shall be considered to be the last day. 

 

30. Certification. PJT Partners shall certify, in writing, compliance with the 

undertakings set forth above. The certification shall identify the undertakings and provide written 

evidence of compliance in the form of a narrative. The Commission staff may make reasonable 

requests for further evidence of compliance, and Respondent agrees to provide such evidence. The 

certification shall be submitted to Thomas P. Smith, Jr., Associate Regional Director, New York 

Regional Office, Securities and Exchange Commission, 100 Pearl Street, Suite 20-100, New York, 

NY 10004, or such other person as the Commission staff may request, with a copy to the Office of 

Chief Counsel of the Enforcement Division, no later than sixty (60) days from the date of the 

completion of the undertakings. 

 

31. In determining whether to accept the Offer, the Commission has considered these 

undertakings. 

  

IV. 

 In view of the foregoing, the Commission deems it appropriate and in the public 

interest to impose the sanctions agreed to in Respondent PJT Partners’ Offer. 

 

 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act, it is hereby 

ORDERED that: 

 

 A. Respondent PJT Partners cease and desist from committing or causing any 

violations and any future violations of Section 17(a) of the Exchange Act, and Rule 17a-4 

thereunder.  



 8 

 

B. Respondent PJT Partners is censured.   

 

C. Respondent PJT Partners shall, within 14 days of the entry of this Order, 

pay a civil money penalty in the amount of $600,000 to the Securities and Exchange Commission 

for transfer to the general fund of the United States Treasury, subject to Exchange Act Section 

21F(g)(3). If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 

§3717.   

 

Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying PJT 

Partners as a Respondent in these proceedings, and the file number of these proceedings; a copy of 

the cover letter and check or money order must be sent to Thomas P. Smith, Jr., Associate 

Regional Director, New York Regional Office, Securities and Exchange Commission, 100 Pearl 

Street, Suite 20-100, New York, NY 10004.   

 

 D. Amounts ordered to be paid as civil money penalties pursuant to this Order 

shall be treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding.   

http://www.sec.gov/about/offices/ofm.htm


 9 

For purposes of this paragraph, a “Related Investor Action” means a private damages action 

brought against Respondent by or on behalf of one or more investors based on substantially the 

same facts as alleged in the Order instituted by the Commission in this proceeding. 

 

By the Commission. 

 

 

 

Vanessa A. Countryman 

        Secretary 

 

 

 


	UNITED STATES OF AMERICA
	Respondent
	Recordkeeping Requirements Under the Exchange Act